How to resize an ellipse into a circle (or a rectangle into a square)?
In short, you should only care about the dimensions, and not really about the scale. After you get the dimensions right (which would make your elliptical cylinder perfectly circular - with equal Z and X dims), you can Apply the Scale via the shortcut CtrlA > Scale.

Or, if you like menus better, through the Object > Apply > Scale menu.

This will reset the scale to 1.0 in all axes without affecting the dimensions.



Explanation for this behavior:

This behavior is due to the fact that an object is an instance of geometrical data, that has a location in 3D space, scale (multiplication of the original geometry's size) and rotation.

In other words, scale is a relative property, which is a multiplication of the "base" scale (of 1, i.e. 100%) - represented by the geometry being instanced. This is why you can have different copies (instances) of the same base geometry that each have a different location, rotation and scale, but all share the same set of vertices, edges and faces in the same basic arrangement in space. 

To see this in action try creating instances (AltD) of an object instead of ordinary duplicates (ShiftD). When you go to edit mode and edit one instance, all other instances are updated.



So in summary, even if you have just one instance of a geometry (such as in your case), it can still have a scale that differs greatly from the base geometry.